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INCOME TAXES | 3 Months Ended
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Mar. 31, 2026
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Pretax (loss) resulting from domestic and foreign operations is as follows (in thousands):
| Three Months Ended March 31, |  | Three Months Ended March 31, |  |  |  |
| 2026 |  | 2025 |  |  |  |
United States | $ | (5,025) |  |  | $ | (2,232) |  |  |  |  |
Foreign | (1,885) |  |  | (1,161) |  |  |  |  |
Total pretax book loss | $ | (6,910) |  |  | $ | (3,393) |  |  |  |  |
The Company recorded income tax benefit of $385 thousand and $150 thousand for the three months ended March 31, 2026 and 2025, respectively. The effective tax rate was 5.6% due to various permanent differences for Boxlight and a change in valuation allowance for certain deferred assets. On July 4, 2025, the president signed H.R. 1 (commonly know as the One Big Beautiful Bill Act) into law. The law introduces many significant federal income tax changes with various effective dates. ASU 740 requires that the effects of a change in tax laws or rates should be recorded in the interim period that includes the enactment date. The company does not expect a material impact on the effective tax rate, but does expect a current tax benefit from utilizing the tax law changes under OBBBA related to expensing of prior year unamortized Domestic IRC Sec. 174 costs, 100% bonus depreciation on personal property, and interest deferred rule changes under IRC Sec. 163J. The Company operates in the United States, United Kingdom, and other jurisdictions. Income taxes have been provided based upon the tax laws and rates of the countries in which operations are conducted and income is earned. The legacy Boxlight entities are in a net deferred tax asset position in the United States and other jurisdictions, primarily driven by the aforementioned net operating losses. The recoverability of these deferred tax assets depends on the Company’s ability to generate taxable income in the jurisdiction to which the carryforward applies. It also depends on specific tax provisions in each jurisdiction that could impact utilization. For example, in the United States, a change in ownership, as defined by federal income tax regulations, could significantly limit the Company’s ability to utilize its U.S. net operating loss carryforwards. Additionally, because U.S. tax laws limit the time during which the net operating losses generated prior to 2018 may be applied against future taxes, if the Company fails to generate U.S. taxable income prior to the expiration dates, the Company may not be able to fully utilize the net operating loss carryforwards to reduce future income taxes. The Company has evaluated both positive and negative evidence as to the ability of its legacy entities in each jurisdiction to generate future taxable income. Based on its long history of cumulative losses in those jurisdictions, it believes it is appropriate to maintain a full valuation allowance on its net deferred tax asset at March 31, 2026 and December 31, 2025. The tax years from 2009 to 2026 remain open to examination in the U.S. federal jurisdiction. The tax years from 2021 to 2026 remain open to examination in the U.K. Statutes of limitations vary in other immaterial jurisdictions.

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